Exercise 9-10

Lowell Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2020.

		January		February		March		April		May
Estimated unit sales		10,400		11,500		8,900		8,700		8,500
Sales price per unit		$50.90		$48.30		$48.30		$48.30		$48.30
Direct labor hours per unit		2.2		2.2		1.5		1.5		1.5
Wage per direct labor hour		$8		$8		$8		$9		$9

Lowell has a labor contract that calls for a wage increase to $9 per hour on April 1. New labor-saving machinery has been installed and will be fully operational by March 1. Lowell expects to begin the year with 16,150 frames on hand and has a policy of carrying an end-of-month inventory of 100% of the following months sales, plus 50% of the second following months sales.

Prepare a production budget for Lowell Company by month and for the first quarter of the year.

LOWELL COMPANY Production Budget For the Quarter Ending March 31, 2020March 31, 2020For the Year Ending March 31, 2020
		Jan		Feb		Mar		Total
Total Materials RequiredRequired Production UnitsDirect Materials PurchasesTotal Required UnitsBeginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitExpected Unit Sales
AddLess : Total Materials RequiredExpected Unit SalesDirect Materials Per UnitRequired Production UnitsBeginning Direct MaterialsTotal Required UnitsDirect Materials PurchasesDesired Ending Direct MaterialsBeginning Finished Goods UnitDesired Ending Finished Goods Unit
Desired Ending Finished Goods UnitBeginning Direct MaterialsBeginning Finished Goods UnitDirect Materials Per UnitTotal Required UnitsDirect Materials PurchasesExpected Unit SalesDesired Ending Direct MaterialsTotal Materials RequiredRequired Production Units
AddLess : Expected Unit SalesTotal Required UnitsDesired Ending Direct MaterialsDirect Materials Per UnitRequired Production UnitsDirect Materials PurchasesDesired Ending Finished Goods UnitTotal Materials RequiredBeginning Finished Goods UnitBeginning Direct Materials
Required Production UnitsDirect Materials Per UnitDirect Materials PurchasesBeginning Direct MaterialsExpected Unit SalesTotal Required UnitsBeginning Finished Goods UnitTotal Materials RequiredDesired Ending Direct MaterialsDesired Ending Finished Goods Unit

Prepare a direct labor budget for Lowell Company by month and for the first quarter of the year. The direct labor budget should include direct labor hours. (Round Direct labor hours per unit answers to 1 decimal place, e.g. 52.7.)

LOWELL COMPANY Direct Labor Budget March 31, 2020For the Quarter Ending March 31, 2020For the Year Ending March 31, 2020
		Jan		Feb		Mar		Total
Direct Labor Cost Per HourBeginning Materials InventoryDesired Ending InventoryDirect Materials PurchasesCost Per PoundUnits to be ProducedDirect Materials Per UnitTotal Pounds Required for ProductionDirect Labor Time (Hours) Per UnitTotal Required Direct Labor HoursTotal Cost of Direct Materials PurchasesTotal Direct Labor CostTotal Materials Required
Total Cost of Direct Materials PurchasesBeginning Materials InventoryTotal Direct Labor CostDesired Ending InventoryTotal Materials RequiredTotal Required Direct Labor HoursUnits to be ProducedDirect Labor Cost Per HourDirect Materials PurchasesDirect Materials Per UnitTotal Pounds Required for ProductionCost Per PoundDirect Labor Time (Hours) Per Unit
Direct Materials PurchasesTotal Cost of Direct Materials PurchasesUnits to be ProducedTotal Materials RequiredTotal Required Direct Labor HoursDirect Materials Per UnitDirect Labor Cost Per HourTotal Pounds Required for ProductionBeginning Materials InventoryTotal Direct Labor CostCost Per PoundDirect Labor Time (Hours) Per UnitDesired Ending Inventory
Cost Per PoundTotal Materials RequiredTotal Required Direct Labor HoursDirect Materials PurchasesTotal Pounds Required for ProductionUnits to be ProducedBeginning Materials InventoryTotal Cost of Direct Materials PurchasesDesired Ending InventoryTotal Direct Labor CostDirect Labor Cost Per HourDirect Labor Time (Hours) Per UnitDirect Materials Per Unit		$		$		$
Total Direct Labor CostTotal Materials RequiredTotal Pounds Required for ProductionBeginning Materials InventoryTotal Required Direct Labor HoursDirect Materials PurchasesDirect Materials Per UnitUnits to be ProducedDirect Labor Time (Hours) Per UnitCost Per PoundDirect Labor Cost Per HourDesired Ending InventoryTotal Cost of Direct Materials Purchases		$		$		$		$